The native token of the Kadena layer 1 blockchain saw a drastic 60% drop within 90 minutes on Tuesday following the founding team’s announcement of winding down and halting all network maintenance due to “market conditions.”
In a statement on X, Kadena announced it “can no longer continue business operations and will be ceasing all business activity and active maintenance of the Kadena blockchain immediately.”
“We are incredibly thankful to everyone who has been part of this journey with us. We regret that market conditions have forced us to stop promoting and supporting this unique decentralized offering,” it conveyed.
The “blockchain for business” branded layer 1 was established in 2016 by Stuart Popejoy and Will Martino.
Popejoy previously led JPMorgan’s former Blockchain Center of Excellence, and Martino, Kadena’s ex-CEO, served as a tech lead for the Securities and Exchange Commission’s cryptocurrency steering committee before committing full-time to Kadena.
The shutdown underscores the difficulties smaller blockchains face in establishing a sustainable user base and achieving profitability amid intense competition from larger chains like Ethereum and Solana.
The Kadena (KDA) token nearly reached a $4 billion valuation in November 2021 but currently stands at $30.9 million, according to CoinGecko data.
Kadena and KDA will remain operational
Kadena stated it would keep a small team for the wind-down phase; however, independent validators can still process transactions and mine blocks on Kadena’s proof-of-work blockchain, it noted.
“The Kadena blockchain is not owned or operated by the company. As a completely decentralized proof-of-work smart contract blockchain, the network is maintained by independent miners, while on-chain smart contracts and protocols are governed by their maintainers,” it elaborated.
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Kadena indicated it would soon “provide a new binary that ensures uninterrupted operation without our involvement, and will urge all node operators to upgrade promptly.”
Kadena must formulate a plan for unlocked KDA tokens
The KDA token will persist, and the Kadena team mentioned it will seek community input on distributing the 83.7 million KDA tokens scheduled for release in November 2029.
Additionally, there are another 566 million KDA tokens to be distributed as mining rewards until 2139, Kadena pointed out.
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